The iPhone is not just a hardware device, it is the core of Apple’s ability to maintain an entire ecosystem.
Editor’s note: This article is from WeChat public account “Love Fan” (ID: ifanr), author: Musi.
After the Apple conference this year, Bloomberg’s well-known technology journalist Mark Gurman wrote that Apple’s biggest surprise is not new equipment, nor new features and services, but a shift in pricing strategy.
With an exclusive source, Mark accurately previewed all the hardware products that will appear before the launch, including the new iPad that was previously thought to be released in October.
But the price cut is unexpected.
In the past three years of the Apple conference, every time Phil Schiller announced the price of the new iPhone, he will release a price map containing the old and new equipment.
This is 2017.
This is 2018.
This is 2019.
Comparing these pictures, you will find that although Apple tried to increase the price range to $999 in the iPhone X era, people with limited budgets can still buy the basic models of the iPhone 8 for $699, even earlier. The iPhone 7 of the year is $649.
to 2018In the year, Apple replaced the traditional digital series of large-screen iPhones with iPhone XR, and the starting price also rose to 749 US dollars. The emergence of Max’s large-screen series made the price limit of the iPhone more than 1,000 US dollars.
Recording back to China, this is the first time a new user needs to spend more than 6,000 yuan to buy a new iPhone. The iPhone XR starts at $6,499, which is closer than when the iPhone 6 and 7 were released. 1000 RMB.
The price curve of the past iPhone. Image from: Horace Dediu
It can be said that the design and the change in screen size have made the iPhone price fluctuations the most frequent in the past three years.
We also said in last year’s review article that considering the rise in iPhone ASP (average selling price) in 2018 and the promotion of revenues, these good news seems to have created an “illusion” for Apple: /p>
iPhone users are not price sensitive and they are willing to accept higher pricing to buy better phones.
But the market obviously didn’t buy it for it. Since the launch of the new product in September last year, the news about the supplier’s production of the iPhone has been heard, and people have seen banners of discount promotions in various third-party channels, which are rarely seen in previous years.
At the same time, combined with the three quarterly earnings announcements released by Apple in 2019, the iPhone business’s revenue has also been declining, and consumers can also see feedback on price increases.
Looking back, last year Apple’s pricing of the iPhone was undoubtedly considered. Raising prices to help ASP rise to offset the decline in sales is Apple’s expected plan, but the story is not good, at least the price increase did not help Apple to fill the sales vacancy.
However, the problem is not how expensive iPhone XS Max is, because the iPhone X’s hot sale proves that as long as the product has enough innovation, there are some core users who don’t care about the price of top equipment, and Apple often Also happy to rely on their own assets, technology to achieve the best results.
The key is that in addition to the flagship, most consumers also need to spend more on the basic iPhone – that is, the 1000 yuan price increase mentioned above, which was in the iPhone 6, 7, and 8 periods. Did not appear.
This feeling is a bit like “gambling”. Apple “bets” that the iPhone XR uses a new comprehensive screen design, and the experience of iOS system and Face ID is good enough, so that people will accept the new price for granted. In fact, it overestimates the price tolerance of mainstream consumers for an iPhone.
The impact of price increases is further magnified in the Chinese market, because the appeal of the iPhone to most Chinese consumers is brought about by hardware such as appearance and process design, and lacks audio and video content services for iOS, local users. The price fluctuations on the iPhone will also be more sensitive.
So, when the price of iPhone XR has dropped significantly in the past six months, sales in China have also picked up, which proves that pricing is still one of the key considerations for users to change.
As for this year’s new machine, Apple’s pricing for the basic iPhone 11 has become more rational. The starting price of $699 corresponds to 5,499 yuan in the country, which means that Apple has re-selected the pricing habits of the iPhone 6 and 7 era.
Even with the highest capacity 256GB model, the price is only $6,799.
Change to last year, you can only buy a 64GB version of the iPhone XR at the same price, plus a silicone case.
With this price cut, Apple’s entire iPhonThe e product line has also changed. According to the habits of previous years, every time Apple releases a new generation of iPhone, it will continue to retain the last two generations of products, but they will all be reduced.
Celebrity analyst Ben Thompson lists two tables, one for the price of the iPhones of the past generations, and the price reductions for the next year; the other shows the price of the entire iPhone line over the years. .
After cross-contrast data, you will find that this year Apple is not just adjusting the price of the iPhone 11 device, in fact it is 3:
1. The iPhone 11, which is positioned on the basic model, has a price drop of $50 compared to the iPhone XR, which was also positioned last year (the decline in China is 1,000 yuan)
2, iPhone XR is still on sale this year, but the price dropped by 150 US dollars (China’s decline of 1700 yuan), while Apple’s old equipment a year ago will often only drop 100 US dollars
3. The iPhone 8 has been on the market for two years. This year, the price has been lowered by US$150, compared with US$100 last year (the decline in China was 1,600 yuan, compared with 789 yuan last year)
It can be seen that in order to return the iPhone product line to the “people-friendly route”, Apple’s price cuts this year are far greater than in the past, especially in China.
The new pricing strategy also carries Apple’s new expectations for the iPhone business.
Even if the upcoming TV+ and Arcade subscription services will bring new growth to Apple, and the wearable devices such as AirPods and Apple Watch have strong market performance, improving iPhone sales is still of great significance to Apple. .
It’s much more than just a hardware device, it’s the core of Apple’s ability to maintain an entire ecosystem.
Of course, for the flagship iPhone, Apple still insists on setting the price at the two high prices of 999 and 1099 US dollars, and also enabled “Pro”, which was only seen on the iPad and MacBook product lines. The suffix name.
The purpose of doing this is not difficult to understand. It can only be said that Apple still has full confidence in the user base at the top of the pyramid. After replacing the confusing “X” letter with the number “11”, the highest end The flagship and basic models also need to have an intuitive representation.
“Pro” has the meaning of “professional” and “leading”, and its value to Apple is also reflected here. After all, you can’t ask a white person who doesn’t know about Apple products to distinguish the meaning behind “XR” and “XS”. Most people will only give a huge question mark.